Employees Still Can't Find Out How Much Health Providers Charge

Employees say it's still not easy to select health care providers based on how much they charge for their services, new research reveals.

More Americans are enrolling in high-deductible health plans, which means they'll pay more out of pocket for "commodity" health services—whether lab tests or common surgeries such as hip and knee replacements. They can shop around for high-quality providers that charge less, but they are finding it difficult to do so.

For example, according to the
Healthcare Bluebook, an online cost comparison tool, a ligament-repairing knee surgery in Grand Rapids, Mich., can cost anywhere between $6,498 and $23,098. In Detroit, a gall bladder removal can range from $3,683 to $16,509.

While some people are using price information to save money, more work needs to be done to achieve widespread adoption and use of price information, finds a report by Public Agenda and the Robert Wood Johnson Foundation, two nonprofits focused on improving health care.

The findings,
published inStill Searching: How People Use Health Care Information in the United States, are based on a nationally representative survey of 2,062 U.S. adults and on surveys of at least 800 adults in Florida, New Hampshire, New York and Texas, all conducted in the latter half of 2016.

"While price transparency alone is not enough to make health care affordable, it does have the potential to help people manage their health spending and save some money," said Will Friedman, president of Public Agenda.

But while a growing number of insurers, health-information vendors and state governments have created websites that contain pricing information for doctors, hospitals and clinics, consumers often find the information not easily accessible—and not specific enough to help them select a lower-cost local provider.

50 percent of Americans have tried to find out how much their health care would cost them before getting care. Similarly, about 48 percent of New York state residents have tried to find price information, as have 56 percent of Floridians, 57 percent of New Hampshire residents and 59 percent of Texans.

Just over half of people who compared prices saved money. But most people who tried to find price information from their health provider did not go on to compare multiple providers' prices. Of the one in five who tried to compare prices, 53 percent say they saved money.

Insurers, employers and state governments are working to make health care price information more available. Nevertheless, 63 percent of Americans say there is not enough information about how much medical services cost.

Most Americans don't think saving money on health care means skimping on quality. Seventy percent say higher prices are not a sign of better quality care, a view supported by research studies finding no clear relationship between the cost and quality of health care.

A surprising number of people don't know that providers charge different prices for the same services. Just under half of Americans are aware that hospitals' prices can vary, and just under half are aware that doctors' prices can vary.

A separate
issue brief from the Robert Wood Johnson Foundation, published last September, summarizes findings from an evaluation of a large Midwestern health information technology firm that used a sophisticated transparency tool created by a start-up (company names were masked). Sixty-two percent of employee households logged on to the transparency tool at least once, but only 10 percent of households used the tool three times or more.

Among other observations, "Households that had higher risk scores…and that were larger and older and presumably more hard-pressed financially were more likely to use the tool. Most importantly, compared to nonusers of the tool, [the] analysis found that tool users did not increase their purchasing of lower-priced services relative to nonusers."

The findings were consistent with other recent studies that evaluated the use and savings from price transparency tools, the brief noted. For instance, a study of a large commercial insurer found that less than 5 percent of employees used the tool with no measurable impact for tool users relative to nonusers. In a study of another large national insurer, researchers again found low use.

Why didn't more households use the transparency tool more extensively? "It is possible that many employees viewed the transparency initiative as simply a means for the employer to save money," the brief said.

The researchers concluded:

It could very well be that we are asking too much of a single tool, no matter how well-designed. Consumer information for other goods and services on price and quality are seldom dependent upon information gained mainly, if not solely, through a digital tool. Rather, information on relative value is spread far and wide through advertising and other kinds of promotion using conventional, digital, and social media communication channels.

In other words, it's not enough to provide access to even a first-rate price transparency platform. Varied messaging delivered continuously over multiple communication channels may be needed to promote employees' use of these tools to find and select lower-priced health care services.

Most Americans say it's a good idea for doctors and their staffs to discuss prices with patients, although few people have actually discussed prices with their providers.

Instead, 55 percent of people who have tried to find price information asked a friend, relative or colleague, and 48 percent contacted their insurance company by phone or used their insurer's website to find prices, according to the Public Agenda/Robert Wood Johnson Foundation survey.

Only 20 percent used the Internet to search places other than their insurance company's website for prices charged by health care providers, while 17 percent said they've used their smartphones for this purpose.

While more large employers are negotiating prices for standardized procedures directly with health care providers, "the reality for most small to mid-size companies is that their health plan members tend to continue to seek health care at the nearest hospital or the one recommended by their doctors or friends," said Tibi Zohar, president and CEO of DoctorGlobe, a website that compares U.S. hospital services and costs.

"The online consumerism revolution has not successfully affected health care consumerism," he noted. At least not yet.

Yet, what is drawing in patients is
Yelp—the website widely known for consumer-driven restaurant reviews. Yelp is beginning to play a role in helping patients with their health care decisions. But whether Yelp ratings will drive patients in the right direction—toward high-quality providers—is still unclear.

Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter.